State Auto Financial (STFC) Misses Q4 EPS by 39c, Revenues Beat

State Auto Financial (NASDAQ: STFC) reported Q4 EPS of $0.29, $0.39 worse than the analyst estimate of $0.68. Revenue for the quarter came in at $367.8 million versus the consensus estimate of $353.1 million.

• Quarterly earnings of $0.72 per share
• Quarterly net income from operations1 of $0.29 per share
• Quarterly GAAP combined ratio of 100.4
• Quarterly SAP personal and commercial segments' combined ratio2 of 97.1
• Return on equity of 9.8%
• Book value per share of $22.01

STFC’s Chairman, President and CEO Mike LaRocco commented on the quarter and year as follows:

“Our fourth quarter and year ended 2019 results reflected the challenges we faced during the year in addition to the considerable progress we made toward more consistent profitable performance. While our personal and commercial lines’ 101.2% SAP combined ratio and 10.2% net written premium growth for 2019 didn’t meet our expectations, we made important, significant progress in several areas including surpassing $2.0 billion in net written premium for the State Auto Group which includes all Pooled Companies.

“The lack of an underwriting profit was driven primarily by our personal lines business, where we identified and have closed product and technology gaps, mainly in our auto line. Higher weather losses also significantly impacted our property results. Our homeowners business grew nearly 20% in 2019, a testament to the powerful combination of our digital technology and new product design.

“2019 was an outstanding year for our commercial lines business, which was profitable with a SAP combined ratio of 97.0 and produced 12.0% net written premium growth. This was a remarkable achievement, the result of two years of rebuilding our commercial lines teams and products. At the same time, work continued toward 2020 launches of farm and ranch and middle market commercial on our digital-only platform, State Auto Connect.

“The foundation we’ve built remains strong. We enter 2020 with the products, pricing, technology and agent partners that will drive our success, and the State Auto team has the creativity, passion and persistence needed to win.”

For earnings history and earnings-related data on State Auto Financial (STFC) click here.

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